Analysts deliberate latest merger wave

So you've had your fill of spin on the latest round of tech mergers, but throwing into the mix some independent analyst perspectives on the Oracle/Siebel and eBay/Skype deals couldn't hurt. Oracle/SiebelNucleus Research gives Oracle high marks for its acquisition of Siebel, saying that the combination of each vendor's technologies will bode well for customers that recognize the value of integrating data from multiple sources to streamline customer support and service.

So you've had your fill of spin on the latest round of tech mergers, but throwing into the mix some independent analyst perspectives on the Oracle/Siebel and eBay/Skype deals couldn't hurt.

Oracle/Siebel

Nucleus Research gives Oracle high marks for its acquisition of Siebel, saying that the combination of each vendor's technologies will bode well for customers that recognize the value of integrating data from multiple sources to streamline customer support and service. And it's a plus for CRM customers since it shortens the distance between Siebel's CRM and Oracle's database, said Nucleus. The ROI-focused firm sees analytics as the next logical battleground; "Whether SQL or Oracle or another database is your platform of choice, it's likely the big moves that impact ROI beyond integration will be made in the BI and analytics world in the next few quarters."

AMR Research echoes the positive sentiment, adding that for Siebel and its customers, the acquisition offers a graceful exit strategy:

Siebel founder and Chairman Tom Siebel acknowledged that there has been a "shift in market dynamics," with more customers opting for integrated application suites from Oracle and SAP rather than the best-of-breed systems that Siebel offers.

But the merger will bring with it some headaches, warns AMR. Oracle may succumb to the "best-of-breed" trap:

Oracle must build and deliver comprehensive, integrated, industry-specific systems. It may be tempting to sell independent software components, but it will never catch SAP with that approach. Customers may not want best-of-breed vendors, but ultimately they don’t want best-of-breed products either.

Info-Tech Research Group, a lesser-known outfit targeting mid-sized organizations, has the only true opposing viewpoint on the deal. According to Info-Tech, Oracle's shopping spree is going to backfire because of the high cost of maintenance fees

By purchasing Siebel, Oracle has acquired an additional 3.4 million CRM users and the maintenance fees that go with that kind of installed base…However, where Oracle may be able to compete with SAP on numbers in the short term, they may have trouble competing longer term on product innovation.

Oracle's development organization is not known for good support of CRM applications, and will require changes to keep Siebel's worldwide user base. Additionally, the timing of Oracle’s Fusion project is now more complicated. Siebel’s offerings will emerge as the blueprint for at least 80 percent of Oracle's next-generation CRM functionality by 2008 (0.8 probability). JD Edwards EnterpriseOne, Oracle E-Business Suite CRM and PeopleSoft CRM customers can expect less focus on new functionality before then.

ebay/Skype

ZDNet's Russel Shaw has written several great posts on his blog about this deal, so I'll leave it light and just point out that across the pond, UK analyst firm Ovum disses eBay's purchase saying that Skype's high price tag ($2.6B) isn’t worth it:

And if eBay is mainly paying for Skype's user base and brand, that makes this a risky investment. Let's not forget that Skype is mainly about cheap or free phone calls. To date, most of its customers have never paid Skype anything, and we suspect that many never will. We would question just how many Skype customers use the service with any regularity.

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